Acc100 Accounting 1 : Account Assessment Answers

To prove negligence on behalf of the defendant, the plaintiff essentially needs to prove the presence of the following three elements.

• The defendant must have a duty to care for the plaintiff arising on behalf of the neighbour relationship shared between them. For this to happen, it is critical that the decision of the defendant to perform a particular action or not to engage in the same is vital to the interest and well being of the plaintiff (Gibson & Fraser, 2014). It is noteworthy that duty to care has to be complied with by the defendant only for the foreseeable dangers as have been outlined in the relevant arguments of the Donoghue v. Stevenson [1932]AC 562 at 580 case. This makes sense since it would be impractical for the defendant to erect safeguards for every situation possible and it is essential for the focus to be limited in purview (Davenport & Parker, 2014).
• As a duty is bestowed on the defendant, it is essential for the defendant to conduct in a manner so that the duty is discharged properly. Discharging the duty would imply taking appropriate measures which another individual caught in a similar situation would undertake so as to prevent the plaintiff from sustaining any damages. However, the contours of reasonable behaviour and steps would vary from one situation to another taking the underlying intensity of damage and also the amount of risk (Latimer, 2016). If the defendant does not take appropriate measures expected from a reasonable person in the circumstances given, then it could be concluded that duty of care has indeed been breached (Harvey, 2009).
• The final condition is that the breach of duty must cause some damage to the plaintiff which is not limited to only financial and physical parameters and also includes wide parameters such as emotional and mental. However, there has to be definite causal link between the breach of duty and the damage suffered. To ascertain the same, it would be prudent to consider whether the same incident would have occurred if there was no breach of duty. Non-occurrence of damage in case of no duty breach establishes the liability of the defendant for negligence (Gibson & Fraser, 2014).

It is noteworthy that in accordance to the Civil Liability Act 2003, it is essential that the plaintiff must take reasonable steps to ensure own safety (Harvey, 2009). Negligence on the part of the plaintiff could also lead to damage or the worsening of damage and this may be highlighted as a potent defence by the defendant to reduce the underlying liability. This has been illustrated in the verdict of the Astley v Austrust Limited (2000) 197 CLR 1; [1999] HCA 6 case (Latimer, 2016).

Application

The conduct of three characters i.e. Cyrus, Huck and Quinn needs to be examined in wake of the above law and the given circumstances.

Cyrus

Condition 1: Duty to care exists since bikes being extended to friends. If the bikes are faulty, then potential damages in the form of accidents and other suffering.

Condition 2: There was a breach of duty to care as Cyrus failed to inform the friends about the front light missing and tail light being functional on one bike only. Even though, he did advice his friends to keep off the freeway but still breach of duty would be deemed to exist.

Condition 3: Olivia met with an accident leading to her bones being broken which is a physical damage. In the given case, both drivers (i.e. Olivia and Huck) were negligent that too at night with a turn approaching and hence it may be concluded the damage would have occurred even if the lights would have been present because it was a turn.

Huck

Condition 1: A duty of care is bestowed on Huck as negligence while driving could cause damage or injury to fellow users of the road and also the pedestrians.

Condition 2: In order to discharge the duty to care like any other reasonable person, Huck would be expected to obey the traffic rules and should also ensure that he does not lose attention or sight of the road. However, in a bid to search for his mobile for a moment he did take off his eyes from the road which led to the accident. Considering it was night time and with a turn in sight, a reasonable person would not be expected to do this. Hence, duty of care has suffered a breach.

Condition 3: Olivia met with an accident leading to her bones being broken which is a physical damage. This potentially could have been avoided had Huck been more careful and vigilant. However, liability would be less for Huck owing to contributory negligence by Olivia since she ignored suggestion by Cyrus and also warnings on the road.

Quinn

Condition 1: Quinn is an electrician by profession and has the duty to care extending to clients especially those having refrigerator repair as delays could mean food spoilage and consequent losses.

Condition 2: Getting caught up in an accident cannot be termed as foreseeable. However, there is no denying that due to delay caused in reaching to the client place, there has been a breach of duty.

Condition 3: As the client had to throw sizable amount of food, financial losses have been incurred. However, the proximate cause of these losses is not Quinn but the accident caused on the road. Hence, Quinn would not be liable to pay damages.

Conclusion:

Negligence has been established for Huck who would have to bear damages for injury to Olivia but the same would be reduced on account of contributory negligence.

2. Case –Cyrus and Rowan

Issue

The issue is to comment on the possible liabilities on the part of Cyrus regarding the revocation of the offer which has already been accepted by Rowan.

Rule

The contract would be enforceable on the parties when there is lawful offer and lawful acceptance. The party who has made the offer is known as offeror and the person towards whom the offer is directed is termed as offeree. The enforceability of offer has been established when the respective offeree has received the offer letter. However, the acceptance would be assumed to be enforceable only when the letter of acceptance has been posted through postal media on the part of offeree. Further, the imperative aspect is the time frame for the revocation of offer by the offeree (Pathinayake, 2014). The offeror can cancel the offer before it has been accepted by the respective offeror. However, after the acceptance towards the offer, the offeror cannot revoke the offer and if the offeror does so, then the offeree has the legal position to recover the damages and sue the offeror. This has been highlighted in the decision of the Adams v. Lindsell (1818) 106 ER 25 case (Peel, 2008).

Application

Based on the given facts, it can be seen that Cyrus is the respective offeror who has directed an offer to Rowan in order to sell four John Deere 125 Ride Mowers. Rowan reverts back and asks for extra details to Cyrus. The details (consideration of $3450 per unit) have been communicated to Rowan by Cyrus along with the date of delivery for the Ride Mowers. On September 25, Rowan has communicated the acceptance for the offer and sent the letter in the name of Cyrus. It can be cited that the valid acceptance is enforceable at the moment when Rowan has put the letter in the name of Cyrus. Hence, the parties have entered into a legal agreement and therefore Cyrus and Rowan have liabilities to satiate the contractual obligation. Further, Cyrus has cancelled the offer after the offer had already been accepted by Rowan on September 25. Therefore, Cyrus does not have the legal position to not perform the obligation or else under the rulings of common law, Rowan can demand for damages by suing Cyrus for breaching the contract.

Conclusion:

From the above it can be decided that an enforceable valid contract has been enacted between Rowan and Cyrus. Therefore, Cyrus cannot cancel the offer and has to satisfy the contractual responsibilities.

Case –Cyrus and James

Issue

The issue arises here is to comment whether Cyrus and James are bound into legal relation irrespective of the fact that James has refused to issue lease for the premises to Cyrus.

Rule

At times the parties have not created legal enforceable relations but they can still be said to be in contractual relation under the provision of doctrine of promissory estoppel. According to this, the rights of the innocent party would be safeguarded when the other party has breached the promise. This principle comes into existence when one party has directed a promise to perform an act for the other party and after a while denies conducting the same for the other party (Edlin, 2007). Also, the other party which has made related arrangements by considering the promise reserves the rights to sue the other party and recover damages incurred by acting in belief that the promise would be fulfilled (Peel, 2008). These parties would be called in legal relation irrespective of the fact that one party does not want to create legal arrangement. The testimony of this aspect is highlighted in the verdict of Commonwealth of Australia v. Verwayen (1990) 170 C.L.R. 394 case (Richard, 2003).

Application

Cyrus who wants to commence a coffee shop in Mount Victoria has received an offer from James. James has directed a promise to Cyrus and has sent a written letter for confirming the representation to provide the shop for lease to him after the existing lease period gets over. By presuming these factors, Cyrus has purchased the business and also fulfilled the various conditions put forward for the lease by James. However, James refused to grant the lease to him.It is apparent that doctrine of promissory estoppel is valid because Cyrus made various expenses depending on the promise of James and hence, the interest of Cyrus would be secured.

Conclusion:

From the applicability of doctrine of promissory estoppel, Cyrus and James are having legal relation. Hence, James has to provide the premises for lease to him or else Cyrus can recover the respective damages by suing James for violation of the contract

Case – Cyrus and Mr. Fallacious

Issue

The issue in this situation is to offer an advice to Cyrus regarding his legal rights to take back monetary donation to the tune of AUD 320,000 from Mr. Fallacious.

Rule

The party who has extended charity to a person or a charity fund without any external force or pressure and the other party who has made any consideration to the donor would be said to be in a legally binding contractual relation. Further, the adequacy of the consideration amount is not necessary because for the exchange of significant amount, even a chocolate wrapper could also be considered as a valid consideration (Pathinayake, 2014). The testimony is the decision of Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87 case. Another requisite is the absence of any misrepresentation or involvement in any unlawful action of the parties. After extending the charity, the party cannot ask for the money back (Peel, 2008)

Application

It can be said that Cyrus has extended the sum of $AUD 320,000 without any liabilities or pressure to Mr. Fallacious. Further, after a period of six months, Cyrus has claimed for money back which would not be possible because they willingly created a contractual relation and also the contract responsibilities get finished. Absence of any duress or undue influence can be derived from the fact that money was asked only when Cyrus decided to get married.

Conclusion:

Cyrus cannot ask for the money back because the contract has already been executed and there is no liability on Mr. Fallacious to return the amount back.

References:

Davenport, S. & Parker, D. (2014). Business and Law in Australia (2^nd ed.). Sydney:LexisNexis Publications.

Edlin, D. (2007). Common law theory (4^th ed.). Cambridge: University Press Cambridge

Gibson, A. & Fraser, D. (2014). Business Law (8^th ed.). Sydney: Pearson Publications.

Harvey, C. (2009). Foundations of Australian law (2^nd ed.). Prahran, Vic.: Tilde University Press.

Latimer, P. (2016). Australian Business Law CC (1^st ed.). Sydney: LexisNexis Study Guide.

Pathinayake, A. (2014). Commercial and Corporations Law (2^nd ed.). Sydney :Thomson-Reuters.

Peel, E. (2008). The Law of Contract (7^th ed.). London: Thompson.

Richard, S. (2003). The Modern Law of Contract (5^th ed.). London: Cavendish.